The global automotive aftermarket continues to offer long-term business opportunity, according to industry experts at IHS Markit, who shared insights during the Automotive Aftermarket Products Expo (AAPEX) in Las Vegas Nov. 2.
Mark Seng, director, global automotive aftermarket practice at IHS Markit, set the stage for the industry during his annual assessment of trends for the aftermarket. New vehicle sales are expected to reach nearly 90 million units globally this year, according to IHS Markit automotive forecasts, and global vehicles in operation will exceed nearly 1.4 billion vehicles by 2021, with two billion vehicles in operation expected by 2040. In the U.S., new vehicle sales are expected to reach 17.4 million units this year, a slight decline from last year, before rising to 17.5 million units in 2017.
“Some believe high new vehicle sales is not a good thing for the aftermarket,” said Seng. “However, I don’t see it that way. Anytime you are adding vehicles to the fleet that’s a good thing. It’s our new business pipeline if you will. Simply more vehicles to repair down the road.”
Vehicle miles traveled in the U.S. continues to increase, driven partly by gas prices remaining low. For the past two years, consumers have traveled more than 3 trillion miles per year, which is up from seven years of declining or flat miles traveled in the 2006-2013 timeframe, according to the US Department of Transportation and Federal Highway Administration. From a global perspective, light duty vehicle miles traveled are estimated to reach more than 10 trillion miles this year, and by 2021, vehicle miles traveled in China will increase nearly 200 percent, according to IHS Markit.
Segment Shifts Affecting Vehicle Fleet Globally
IHS Markit tracks nearly 30 different vehicle segments but just four represented nearly 60 percent of new vehicle registrations in 2015, according to IHS Markit analysis. Crossovers have quickly increased in popularity. Compact CUVs are commanding nearly 19 percent of the market YTD 2016, with traditional compact cars (13.4 percent), mid-size sedans (12.7 percent) and full-size pickup trucks (12.3 percent) rounding out the top four.